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NexLearn, LLC v. Allen Interactions, Inc.

United States Court of Appeals, Federal Circuit

June 19, 2017

NEXLEARN, LLC, Plaintiff-Appellant
v.
ALLEN INTERACTIONS, INC., Defendant-Cross-Appellant

         Appeals from the United States District Court for the District of Kansas in No. 6:15-cv-01294-EFM-KGG, Judge Eric F. Melgren.

          Paul K. Vickrey, Vitale Vickrey Niro & Gasey, Chicago, IL, argued for plaintiff-appellant.

          Martin B. Pavane, Cozen O'Connor, New York, NY, argued for defendant-cross-appellant. Also represented by Darren Scott Mogil.

          Before Moore, Schall, and Hughes, Circuit Judges.

          Moore, Circuit Judge.

         NexLearn, LLC appeals from the District of Kansas' dismissal of its complaint for lack of personal jurisdiction. For the reasons discussed below, we affirm.

         Background

         On September 24, 2015, NexLearn filed suit against Allen Interactions, Inc. ("Allen") in the District of Kansas alleging infringement of U.S. Patent No. 8, 798, 522 ("the '522 patent") and breach of contract. NexLearn alleged in its complaint that on February 10, 2009, Allen and NexLearn entered into a nondisclosure agreement ("NDA") to allow Allen to learn more about NexLearn's social simulation software called SimWriter®. It alleged that pursuant to the NDA, NexLearn provided Allen with a trial version of SimWriter, which Allen accessed "on several occasions, after which Allen stated it was no longer interested in pursuing a deal with NexLearn." J.A. 38. It alleged Allen thereafter developed its social simulation software called ZebraZapps based on information it "learned from its analysis of the confidential demo, " giving rise to NexLearn's claims of patent infringement and breach of contract. J.A. 38-39. NexLearn asserted infringement of at least claims 1, 3-9, 11, 12, 14, and 25 of the '522 patent, which is directed to a computer program for social simulation, and asserted breach of the NDA by misusing NexLearn's confidential information. The NDA contains a choice-of-law provision stating Kansas law governs the agreement.

         Allen moved to dismiss NexLearn's complaint for lack of personal jurisdiction.[1] Allen is a Minnesota corporation with its principal place of business in Mendota Heights, Minnesota. It argued it was not subject to specific or general jurisdiction in Kansas due to its limited contacts with the forum, which it argued amounted to a single sale unrelated to its ZebraZapps product and represented less than 1% of its revenue over the past five years. It argued the NDA's choice-of-law provision did not subject it to an action in Kansas because NexLearn's complaint asserted that its breach of contract claim was supplemental to its patent infringement claim, J.A. 36, requiring NexLearn to establish personal jurisdiction over its infringement claim in order to bring its contract claim.

         NexLearn opposed Allen's motion and filed additional evidence to support its claim that the court could exercise personal jurisdiction over Allen under a specific jurisdiction theory. NexLearn's president, Dennis Rees, filed a declaration stating Allen agreed to an End-User License Agreement ("EULA") when it accessed the SimWriter trial. The EULA specifies that "any dispute arising out of or related to this Agreement or the Product must be brought exclusively in a court sitting in Wichita, Kansas." J.A. 216. Mr. Rees declared that since launching Zebra-Zapps in 2011, Allen "continually sent direct emails regarding ZebraZapps to two NexLearn employees." J.A. 187 ¶ 2. He declared that another NexLearn employee was offered a free trial of ZebraZapps after attempting to purchase ZebraZapps from Allen's website without success. He declared Allen specifically targeted Kansas residents by including Kansas in the address selector's dropdown menu on its ZebraZapps website. The declaration summarized Allen's activities with a trade association, which disseminated a magazine to Kansas residents that included an advertisement for Allen.

         Drawing all reasonable inferences in favor of NexLearn, the district court held that NexLearn failed to allege that Allen had sufficient contacts with Kansas to permit the exercise of specific jurisdiction. It determined the NDA and EULA Kansas choice-of-law and forum-selection provisions were not relevant for specific jurisdiction over NexLearn's patent infringement claim. It held that because five of Allen's six emails to NexLearn employees were sent before the '522 patent issued on August 5, 2014, NexLearn's patent infringement claim could not have arisen out of or related to these emails. It held Allen's sole post-issuance email, as well as its offer of a free trial of ZebraZapps to a NexLearn employee, could not form a basis for exercising jurisdiction because these contacts were manufactured by NexLearn's unilateral acts. The NexLearn employees, it reasoned, received Allen's emails only because they subscribed to Allen's mass emailing list and received a free trial of ZebraZapps only because of a purchase attempt. Regarding Allen's ZebraZapps website, the district court held the website alone, absent evidence of an actual sale, was insufficient to confer specific jurisdiction. It held neither Allen's single sale of an unaccused product to a Kansas resident nor its general advertisement in a trade publication was relevant to NexLearn's patent infringement claim. Because it held it lacked personal jurisdiction over NexLearn's patent infringement claim, and because NexLearn did not assert breach of contract as an independent basis for the district court's subject matter jurisdiction, the district court granted Allen's motion to dismiss.

         NexLearn appeals. We have jurisdiction under 28 U.S.C. § 1295(a)(1).

         Discussion

         "Personal jurisdiction is a question of law that we review de novo." Autogenomics, Inc. v. Oxford Gene Tech. Ltd., 566 F.3d 1012, 1016 (Fed. Cir. 2009). We apply Federal Circuit law when reviewing claims "intimately involved with the substance of the patent laws" and the law of the regional circuit when reviewing state law claims. Elecs. for Imaging, Inc. v. Coyle, 340 F.3d 1344, 1348 (Fed. Cir. 2003). Where, as here, the district court decided personal jurisdiction "based on affidavits and other written materials in the absence of an evidentiary hearing, a plaintiff need only to make a prima facie showing that defendants are subject to personal jurisdiction." Avocent Huntsville Corp. v. Aten Int'l Co., 552 F.3d 1324, 1329 (Fed. Cir. 2008). We "accept the uncontroverted allegations in the plaintiff's complaint as true and resolve any factual conflicts in the affidavits in the plaintiff's favor." Id. To make a prima facie showing, we ask "whether a forum state's long-arm statute permits service of process and whether assertion of personal jurisdiction violates due ...


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